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Pensions: a troubling anomaly

Representations and complaints have been made to political parties and State agencies for years

Fri, Oct 20, 2017, 00:02

Minister for Social Protection Regina Doherty has undertaken to review an anomaly whereby up to 40,000 people, mainly women, receive smaller State pensions than those with a similar number of welfare stamps. A commitment to change the regulations has been so hedged by qualifications, however, that those affected need not expect an early resolution. It is a disappointing response to what amounts to unfair treatment.

Representations and complaints have been made to political parties and State agencies for years, but with little effect

Any large and complex administrative system contains anomalies. But State pension arrangements are broadly fair and transparent. They are also generous, when compared to those of other EU countries. In these cases, however, because the numbers of social contributions made were averaged out over an entire working life, those with breaks in employment – involving early student jobs, forced Civil Service retirements or family-related activities – have lost out. That in-built disadvantage should be corrected.

A catch-cry of fairness became a potent political weapon in the last general election, to the detriment of Fine Gael

Representations and complaints have been made to political parties and State agencies for years, but with little effect. Doherty estimated it would cost €73 million to remove the anomaly in 2018. The best she could offer was a review of paper and digital records to establish the numbers affected and to take remedial action at some future time, if the problem could be fixed in isolation. As a commitment, it lacked a cutting edge.

Removing the anomaly is obviously not a Government priority. The provision may be “bonkers”, as Minister for Finance Paschal Donohoe observed, and it probably amounts to a footnote in plans to change the entire pensions system by 2020. That is likely to involve merging the PRSI system and the Universal Social Charge and may prove contentious, particularly if pension payouts for new entrants fall. A catch-cry of fairness became a potent political weapon in the last general election, to the detriment of Fine Gael. If Taoiseach Leo Varadkar persists in wooing voters from the “squeezed middle”, he should take out political insurance and provide for these disadvantaged pensioners.

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